China's SPIC slashes Brazil hydro output, launches natgas plant amid drought

SPIC Brasil is additionally exploring hydrogen fuel technology in the country

  
Image used for illustrative purpose. A hydropower station stands on the Changma river on the outskirts of Yumen, Gansu province, China, September 28, 2020. REUTERS/Carlos Garcia Rawlins

Image used for illustrative purpose. A hydropower station stands on the Changma river on the outskirts of Yumen, Gansu province, China, September 28, 2020. REUTERS/Carlos Garcia Rawlins

BRASILIA- China's State Power Investment Corp (SPIC) is operating only three or four of its six turbines at its Sao Simao hydroelectric dam in Brazil each day, the chief executive of its Brazilian unit told Reuters on Tuesday, as a record drought roils the energy sector.

Water inflows at Brazil's hydroelectric plants during the 2020-2021 rainy season were the lowest in 91 years, according to the Mines and Energy Ministry, with relief set to come only when rains likely return in November.

SPIC Brasil Chief Executive Adriana Waltrick said that a natural gas power plant, GNA, was launched last week, in which the company is one of several investors, and its 1.3 gigawatt capacity is being put to full use immediately to help offset the nationwide decline in hydro output.

Waltrick said she foresees potential operational difficulties ahead but that there is little chance that water rationing will be necessary, citing improvements in the overall electric system since the last major drought that required rationing.

"It is possible there will be some difficulties in the system's peak (usage) periods. We think that there is low probability of rationing depending on rains from now until the end of November," she said.

Climate change, and the resulting increased risk of extreme weather events like the drought, means the electric sector needs to change the way it operates, Waltrick said.

That includes increasing solar and wind output, but hybrid models - such as integrating hydro plants with solar panels and batteries - are also needed, she said.

SPIC Brasil is additionally exploring hydrogen fuel technology in the country.

The company plans to continue expanding in natural gas, with the second phase of the GNA project to launch in 2025 and two further phases of expansion to depend on federal energy auctions. SPIC holds a 33% stake in the project in partnership with BP, Siemens and Prumo Logistica.

(Reporting by Jake Spring in Brasilia Editing by Matthew Lewis) ((jake.spring@thomsonreuters.com; +55 61 99653-2429; Reuters Messaging: jake.spring.thomsonreuters.com@reuters.net / Twitter: https://twitter.com/jakespring))


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